Annual report pursuant to Section 13 and 15(d)

3. New Accounting Standards (Tables)

v3.20.1
3. New Accounting Standards (Tables)
 12 Months Ended
Dec. 31, 2019
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Financial Statement Impact of Transition to ASC 606

As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:

 

 

    December 31,         Adjusted
    2017   Adjustments   January 1,
    As Reported   due to ASC 606   2018
ASSETS                  
Current assets                  
Cash   $  460,059   $  -   $  460,059
Accounts receivable, net of allowance for doubtful accounts of $2,280      885,743      544,599      1,430,342
Other current assets      209,536      -      209,536
Total current assets      1,555,338      544,599      2,099,937
Goodwill      803,118      -      803,118
Intangible assets, net      676,436      -      676,436
Accounts receivable, long term      -      424,023      424,023
Other assets      88,916      -      88,916
TOTAL ASSETS   $  3,123,808   $  968,622   $  4,092,430
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Current liabilities                  
Accounts payable   $  1,096,003   $  -   $  1,096,003
Accrued interest      1,168      -      1,168
Accrued and deferred personnel compensation      590,500      -      590,500
Deferred revenue and customer deposits      1,429,266      -      1,429,266
Notes payable, net - current maturities      2,236,224      -      2,236,224
Other current liabilities      226,355      191,121      417,476
Total current liabilities      5,579,516      191,121      5,770,637
                   
Non-current liabilities                  
Notes payable, net - long term      180,810      -      180,810
Other long term liabilities      -      150,477      150,477
Total non-current liabilities      180,810      150,477      331,287
Total liabilities      5,760,326      341,598      6,101,924
Commitments and Contingencies (See Note 9)                  
Stockholders' equity                  
Common stock, $0.001 par value; 100,000,000 shares authorized; 37,025,140 and 37,025,140, shares issued and outstanding      37,025      -      37,025
Equity payable      100,862      -      100,862
Additional paid-in capital      77,910,842      -      77,910,842
Accumulated other comprehensive loss      (65,764)      -      (65,764)
Accumulated deficit      (80,619,483)      627,024      (79,992,459)
Total stockholders' equity      (2,636,518)      627,024      (2,009,494)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $  3,123,808   $  968,622   $  4,092,430

 

The following tables reflect the impact of adoption of ASC 606 on our condensed consolidated statements of operations for the year ended December 31, 2018 and our condensed consolidated balance sheet as of December 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”):

 

Condensed Consolidated Statement of Operations

 

    Twelve Months Ended December 31, 2018
    As reported     Total Adjustments Under ASC 606   Amounts Under Previous Standards
Revenues                  
Revenues   $     11,556,536   $       2,692,692   $       8,863,844
Cost of revenues           3,932,334                          -           3,932,334
Gross profit           7,624,202           2,692,692           4,931,510
                   
Operating expenses                  
General and administrative           4,155,636              148,287           4,007,349
Sales and marketing           3,931,469                          -           3,931,469
Engineering, research, and development           3,713,787           1,334,582           2,379,205
Depreciation and amortization              486,255                          -              486,255
Total operating expenses         12,287,147           1,482,869         10,804,278
Income (loss) from operations     (4,662,944)       1,209,823        (5,872,768)  
Other income/(expense)                  
Interest income     4,145        -        4,145   
Interest expense     (210,422)       -        (210,422)  
Goodwill impairment     (2,288,057)       -        (2,288,057)  
Loss on sale of fixed assets     (8,722)             (8,722)  
Loss on conversion of debt     (41,903)             (41,903)  
Foreign currency loss     (7,745)       -        (7,745)  
Total other income/(expense)     (2,552,704)       -        (2,552,704)  
Income (loss) before income taxes     (7,215,649)       1,209,823        (8,425,472)  
Income tax expense     -        -        -   
Net income (loss)     (7,215,649)       1,209,823        (8,425,472)  
Other comprehensive income (loss), net of income tax                  
Foreign currency translation adjustments     70,523        -        70,523   
Comprehensive income (loss)   $ (7,145,126)     $ 1,209,823      $ (8,354,949)  
                   
Net income (loss) per share:                  
Basic   $ (0.17)     $ 0.03      $ (0.20)  
                   
Weighted average number of shares outstanding:                  
Basic     42,133,368        42,133,368        42,133,368   

 

Condensed Consolidated Balance Sheet

 

    December 31, 2018 As Reported   Total Adjustments Under ASC 606   Amounts Under Previous Standards
ASSETS                  
Current assets                  
Cash   $ 554,255      $ -      $ 554,255   
Accounts receivable, net of allowance for doubtful accounts of $9,828     601,658        -       601,658  
Contracts receivable, current     578,869        (578,869)        -   
Other current assets     736,309        -        736,309   
Total current assets     2,471,091        (578,869)       1,892,222   
Goodwill     537,550        -        537,550   
Intangible assets, net     1,781,448        -        1,781,448   
Contracts receivable, long term     2,113,823        (2,113,823)       -   
Other assets     527,146        -        527,146   
TOTAL ASSETS   $ 7,431,058      $ (2,692,692)     $ 4,738,366   
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Current liabilities                  
Accounts payable   $ 1,731,628      $ -      $ 1,731,628   
Accrued interest     9,167        -        9,167   
Accrued and deferred personnel compensation     350,311        -        350,311   
Deferred revenue and customer deposits     1,956,938        -        1,956,938   
Notes payable, net - current maturities     1,279,590        -        1,279,590   
Other current liabilities     723,636        (622,369)       101,267   
Total current liabilities     6,051,270        (622,369)       5,428,901   
                   
Non-current liabilities                  
Notes payable, net - long term     194,328        -        194,328   
Other long term liabilities     860,500        (860,500)        
Total non-current liabilities     1,054,828        (860,500)       194,328   
Total liabilities     7,106,098        (1,482,869)       5,623,229   
                   
Commitments and Contingencies (See Note 9)                  
                   
Stockholders' equity                  
Common stock, $0.001 par value; 100,000,000 shares authorized; 45,998,053 and 45,998,053, shares issued and outstanding     45,998        -        45,998   
Equity payable     100,862        -        100,862   
Additional paid-in capital     88,008,473        -        88,008,473   
Accumulated other comprehensive loss     4,759        -        4,759   
Accumulated deficit     (87,835,132)       (1,209,823)       (89,044,955)  
Total stockholders' equity     324,960        (1,209,823)       (884,863)  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 7,431,058      $ (2,692,692)     $ 4,738,366